BSkyB Faces $4.2 Billion Payout Quandary on Murdoch Scandal

[dipsydoodle]

Source: Bloomberg

British Sky Broadcasting Group Plc’s board of directors faces a dilemma over a potential 2.6 billion- pound ($4.2 billion) payout to shareholders that would also go to Rupert Murdoch’s News Corp., the company whose bid for BSkyB collapsed because of a phone-hacking scandal.

The 14-person board, chaired by son James Murdoch, will on July 28 consider a one-time dividend to investors, said a person familiar with the matter, who asked not to be named because the meeting is private. BSkyB stock dropped 17 percent in seven days before the hacking allegations forced News Corp. to shelve its offer for full control of the U.K. pay-TV company. News Corp. is BSkyB’s biggest shareholder with a 39 percent stake.

“They’ve ended up in a position where they can’t do the right thing, because that involves doing the wrong thing by some people,” said Chris Bryant, the opposition Labour lawmaker who is suing News International, the News Corp. unit that published the News of the World, the newspaper that was closed down this month as the phone-hacking crisis engulfed Murdoch’s media empire.

Read more: http://www.bloomberg.com/news/2011-07-25/bskyb-directors-face-4-2-billion-quandary.html

[Hubert Flottz]

1. K&R

[beac]

2. Unreal. Murdoch Jr. gets to chair a meeting deciding on how much loot to

give his daddy and siblings. Disgusting.

Hoping the BSkyB board at LEAST finds a way to exorcise that cancer from its membership.

[dipsydoodle]

3. James Murdoch Said to Have Backing of BSkyB Board as Payout Options Mulled

James Murdoch, the son of News Corp. Chief Executive Officer Rupert Murdoch, is poised to stay on as chairman of British Sky Broadcasting Group Plc (BSY) as the U.K. pay- TV company’s board reviews options for investor returns today, said two people with knowledge of the matter.

The younger Murdoch has the backing of key shareholders and directors of BSkyB, even after his testimony last week to U.K. lawmakers over the phone-hacking scandal around News Corp.’s now defunct News of the World tabloid was contradicted by two former employees, said the people, asking not to be identified because the talks are private. The 38-year-old’s position at BSkyB isn’t on the agenda of today’s meeting, one of the people said.

The 14-person board also plans to discuss whether BSkyB will return cash to shareholders, with a share buyback a more likely option than a one-time dividend, one person said. A stock repurchase may follow previous buybacks where News Corp. (NWSA)’s voting rights were kept unchanged even though its 39 percent economic interest in BSkyB would increase, the person said. The board may also decide not to implement a cash-return program, the person said.

http://www.bloomberg.com/news/2011-07-27/james-murdoch-said-to-have-backing-of-bskyb.html